Papco Revives Abandoned Nn Terminal

Fuel Company Renovated, Rejuvenated Eyesore

January 04, 1998|By DENNIS O'BRIEN Daily Press

A few years ago, the abandoned Sanford & Charles petroleum terminal on the Newport News waterfront lay in ruins.

Rust etched holes in its hefty tanks and gnawed through its serpentine pipes. Discarded tires and other junk surrounded the dilapidated equipment, and in an office where executives once met to make hot deals, vagrants gathered around campfires to cook hot meals.

But last summer, Virginia Beach-based PAPCO Oil Co. took over the site and began cleaning house. Today, the terminal is no longer, well, terminal; it's thriving.

The facility, on city land in the Newport News Seafood Industrial Park at the end of Jefferson Avenue, is just the latest in a series of takeovers that have fueled PAPCO's estimated 15 percent annual growth. Just last week, for example, PAPCO announced that it has bought a Chesapeake residential oil service and fleet-refueling facility from Richmond-based Southern States Cooperative.

In fact, PAPCO made a name for itself - literally - with its growth-by-acquisition strategy.

In 1976, the family-owned Princess Anne Petroleum Co. bought CAPCO, a bankrupt petroleum company owned by C.R. Capshaw, and "PAPCO" was born.

PAPCO started small, with a handful of heating oil customers and retail gas stations, but it didn't stay that way for long.

"Through acquisitions, we increased our presence in the residential market and developed our retail presence," said PAPCO's owner and president, John Malbon. "Since then, we've focused on developing the commercial market."

PAPCO first established a modest presence on the Peninsula in 1988 at Gunter Oil in Hampton. In 1991, PAPCO leased space at Hampton's York Oil Terminal.

The company began eyeing the Newport News location in 1995, and was ultimately lured here by the terminal's 15-foot draft, greater storage space and accessibility for commercial marine customers. Marine traffic at the Hampton location was primarily recreational.

Additionally, the terminal is in the shadow of Interstate 664 - a convenient location for PAPCO's trucking customers.

After a series of negotiations with the city, consultations with engineers and listening to the concerns of state and federal regulators, the company went to work reviving the terminal.

To make it functional again, the company yanked out all the 45-year-old pipes and replaced them with above-ground piping, so leaks would be easy to spot and repair. The company also had to tear down seven cracked above-ground tanks and rip out one underground tank.

Then there was the trash.

After years as an impromptu dump site where trawlers dumped broken parts, rowdies and rummies pitched their empties and old tires rolled to a stop, it took eight Dumpsters to carry out the rubbish. Beer and liquor bottles alone filled one container.

It wasn't an easy task.

"There were no engineering drawings to show where the underground piping went, so basically it was a search and destroy mission," said Steve Pavlik, the Newport News terminal manager.

"And there were many, many containers of mystery products that people with no other place to put it put here," Pavlik said. "That was a big challenge to us, to dispose of it properly."

A few months and $500,000 later, the Jefferson Avenue site is state-of-the-art.

It meets or exceeds all city, state and federal environmental regulations, Pavlik said, including spill-protection rules imposed after the 1989 Exxon Valdez accident that belched 11 million gallons of crude into Alaska's Prince William Sound.

All four of PAPCO's Newport News tanks are double-bottomed, meaning that if the tank's inner skin springs a leak, the outer layer will hold it. Such contingencies are important for a site capable of storing 1.5 million gallons.

The company gets its oil from Texas via the Virginia Pipeline, which delivers the product to a PAPCO site in Chesapeake. Kerosene, lubricants, off-road diesel and higher-grade on-road diesel are shipped by either truck or barge to Newport News. Barges can move up to 336,000 gallons at a time; trucks move about 7,500 gallons each.

Once the petroleum is in Newport News, the site's pumping systems can load and unload product at hectic speeds. PAPCO's pumps can drain a truck in 20 minutes, compared with the industry average speed of 45 minutes, Pavlik said. Through pipes 2 inches in diameter, the pumps can gush 180 gallons of diesel a minute into ocean-going tugs at dockside. Usually those tugs have to take on fuel in 55-gallon-drum increments.

PAPCO plans to add gasoline distribution to the Newport News site's mix when the terminal goes fully on-line this spring.

When it does, Newport News will have about 20 new jobs. The company is looking for truck drivers, administration staffers, fuelers, general maintenance workers and heating and cooling specialists.

PAPCO's pride in the restoration job is evident from the shine of its tanks and the trucks that roll through the terminal. The place looks far different from when Malbon's company first spied the property.

"One thing we're really proud of is to be able to take an eyesore out of the city and put the space back in business," Malbon said.

PAPCO OIL COMPANY

Business: Supplies petroleum products to residential, government and commercial trucking and marine customers.